This blog entry will dispel common myths and educate you on the general process of bankruptcy in Florida.
QUESTION: Who is the Trustee in Chapter 7 Bankruptcy and what is their role?
The Chapter 7 Trustee is appointed by the United States Trustee’s Office to administer the Chapter 7 Bankruptcy Case. In a nutshell, the Chapter 7 Trustee is the intermediary between the Debtor and his/her creditors. Any assets that are non-exempt under Florida law become the property of the Bankruptcy Estate and the Chapter 7 Trustee is charged with administering the Asset for the benefit of the Bankruptcy Estate (i.e. sell to payoff the Debtor’s creditors). Chapter 7 Trustee often decide to “abandon” the asset due to the fact that administrative burden and/or costs outweigh the funds that can be obtained by selling the asset. The Chapter 7 Trustee will generally file a Notice of Abandonment with the Court indicating that the asset is abandoned and once again becomes the Debtor’s Property.
The Chapter 7 Trustee also determines if the bankruptcy schedules accurately reflect Debtor’s assets, liabilities, and income on the date of filing bankruptcy. If the Chapter 7 Trustee determines that Debtor is “hiding something,” then the Chapter 7 Trustee has the right to conduct a 2004 Examination (which the Chapter 7 Trustee or their attorney will conduct a deposition of the Debtor and may require Debtor to bring certain documents to the 2004 Examination).
If the Chapter 7 Trustee determines that the Debtor has assets that exceed the exemptions, then the Chapter 7 Trustee will file a Notice of Assets with the Court. The Debtor has the right to reach a settlement with the Chapter 7 Trustee and agrees to “buy back” the asset from the Chapter 7 Trustee.
If all the assets of the Debtor are exempt under Florida law, then the Chapter 7 Trustee will determine that the case is a “No-Asset Case” and Debtor will obtain his or her discharge.
For more information, please contact the experienced bankruptcy attorneys at The Wallace Law Group with convenient office locations in Boynton Beach, Fort Lauderdale, Aventura and Downtown Miami.